Paper 1 · Specimen 2026 · Forms of Enterprise
In a franchise agreement, the regular payment a franchisee makes to the franchisor out of its turnover is called a
Model answer
royalty
Also accepted: royalties, royalty payment, royalty fee
Explanation
The initial fee buys entry to the chain; the royalty is the continuing charge, usually a percentage of turnover, that pays for the brand, the national advertising and the support the franchisor supplies.
Derived from ZIMSEC Business Enterprise Skills Paper 1, Specimen, Q1